OSHAWA, Ont. - Jack Layton stopped in the cradle of Canadian manufacturing Wednesday morning to announce the NDP's plan to cut the small business tax rate by two percentage points and introduce a job creation tax credit.

The job creation tax credit would give all big and small business $4,500 per new hire. The party would also increase the corporate tax rate to 19.5%. It currently sits at 16.5%.

"Corporate tax cuts have been bad economic policy," said Layton. "To take them down as far as they've gone has not produced jobs. In fact, it's allowed Canadians' money to go to companies that ship jobs oversees or to the States."

The corporate tax hike would increase the government's revenues by $5.9 billion, while the small business tax cut and the job creation tax credit would cost the government $2 billion a year, the party says.

Layton made the announcement at a kitchen cabinet manufacturer in Oshawa, located about 50 km east of Toronto.

Layton also endorsed party candidate Chris Buckley, who is running in the Oshawa riding. Buckley is a GM employee who has been involved with union negotiations.

"He has stood with the people of Oshawa through thick and thin," said Layton.

Manufacturing is a major employer in the Oshawa area, despite a devastating shutdown and subsequent reopening of the GM plant. It also has a rich labour history. It was the site of the Oshawa Strike in 1937, when about 4,000 GM workers hit the picket lines. It is also considered to be the birthplace of industrial unionism.

The NDP sees this riding, and its background, as an opportunity. The party came in second in the Oshawa riding to the Conservatives in 2008 by about 3,200 votes. The party hopes to push out the incumbent, Colin Carrie, and claim the seat.

The party continues to target Tory ridings that were tight races in the past.

Layton will head to Brampton Wednesday afternoon to visit the MacDonald Dettwiler Space and Advanced Robotics plant. The aerospace technology company is best known for making robotic arms for U.S. space shuttles and the International Space Station.